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Don Mansfield

Small Business Participation Plans

Small Business Participation Plans  

9 members have voted

  1. 1. Does the practice of incorporating small business participation plans into contracts (as described below) have either a 1) significant effect beyond the internal operating procedures of the agency or 2) have a significant cost or administrative impact on contractors or offerors?

    • Yes
      6
    • No
      3
  2. 2. Is the practice of incorporating small business participation plans into contracts (as described below) a FAR deviation as defined at FAR 1.401(f)?

    • Yes
      2
    • No
      7
  3. 3. Assuming the small business participation plan is incorporated into either Section H of the contract or the statement of work, is it legally enforceable?

    • Yes
      5
    • No
      4


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8 hours ago, joel hoffman said:

Vern, I did say that using go/no-go (acceptable/unacceptable) evaluation criteria would be problematic. This was because the DFARS language in 15.304 (c)(1) describing “examples of evaluation factors” (which has been moved to the  PGI at 15.304(c)(I)(A),  appears to use some comparative language. I doubt that these would rise to the level of individual “factors” in real source selection plans. They are evaluation criteria.  More sloppy wording. 

@joel hoffman

Are you saying that there is a distinction between evaluation "factors" and evaluation "criteria"? If so, what is the distinction?

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10 hours ago, Vern Edwards said:

@joel hoffman

Are you saying that there is a distinction between evaluation "factors" and evaluation "criteria"? If so, what is the distinction?

Yes, there is a distinction. Factors are the high level, key discriminators which represent those specific characteristics that are tied to the significant RFP requirements. FAR 15.304(a) discusses factors and subfactors.  The Army Source Selection Supplement to the DoD Source Selection Procedures provides guidance to "Identify key discriminators to be evaluated" and "define the discriminators as evaluation factors and subfactors and their relative order of importance."

"Factors" should be limited in number for various reasons, such as reducing complexity, not diminishing the importance of any one KEY aspect of the evaluation, the fact that the relative importance of each factor in comparison to the others must determined and stated in the evaluation plan and RFP. Similarly, the relative importance of subfactors under a factor must also be determined and stated.

I probably erred in calling the multiple aspects of small business participation that the DFARS described as "factors" as "evaluation criteria".   They don't rise to the level of factors or even subfactors.  If they were factors or subfactors,  they would have to be somehow weighted or stated in terms of relative importance to other factors or subfactors under the factor level. For me, that would be overkill. 

In addition, the overall evaluation of the small business participation might well be designated no higher than as a subfactor under some related factor. 

The individual aspects could be classified as "elements",  per the Army Source selection jargon (see below). They are simply various aspects of a factor or subfactor that the DoD wants to be evaluated.

Evaluation criteria would be developed to describe what and how they are to be evaluated. 

Sorry for being "sloppy"!

 

FAR 15.304 says in part:

Quote

 

(a) The award decision is based on evaluation factors and significant subfactors that are tailored to the acquisition.

(b) Evaluation factors and significant subfactors must—

(1) Represent the key areas of importance and emphasis to be considered in the source selection decision; and

(2) Support meaningful comparison and discrimination between and among competing proposals.

(c) The evaluation factors and significant subfactors that apply to an acquisition and their relative importance, are within the broad discretion of agency acquisition officials,

 

 

DoD Source Selection Procedures:

Quote

Evaluation factors and subfactors represent those specific characteristics that are tied to significant RFP requirements.  They are the uniform baseline against which each offeror’s proposal is evaluated allowing the Government to make a determination of acceptability.  The evaluation factors and subfactors shall be set forth in the solicitation in enough depth to communicate what will be evaluated.  The evaluation factors and subfactors shall be the primary determinant of the detailed information requested in the solicitation’s instructions to offerors.

Army Source Selection Supplement:

Quote

 

Identify key discriminators to be evaluated ... 

Define the discriminators as evaluation factors and subfactors and their relative order of importance..

...The standard Army naming convention for the various levels is: Evaluation Factor – Subfactor – and Element.  Figure 2-4 illustrates a sample evaluation factor structure.  More evaluation factors are often a net negative.  Use caution when subdividing factors into multiple levels of subfactors since they further diminish the importance of any one aspect of the factor and introduces unnecessary complexity into the source selection process.  This can also lead to closely rated proposals with little discrimination among competitors and no distinction among criteria that drive performance and criteria that have no real impact.   

 

GOTTA go - I have to be at church to oversee the fire suppression system testing and inspection.....

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@Don Mansfield @joel hoffman

Sorry for the confusion my comment about being a small business was rhetorical to provide an example.   While I am a small business I have never had a prime contract with a Fed agency but have been a sub to a Fed prime.  

Back to the issue and attempt to answer questions from just a viewer.

First I haven't missed a rodeo, I am volunteering at the best one in North America right now, always in the second full week of September, The Pendleton Round-Up.  You all should come once to this week long community event that is now in its 108th year.

To RFA and the overall concern I for one can not think of a contractual requirement that does not carry administrative burden.  This extended thread is a perfect example.

In a hope to be concise DoD's best practice is a duplication of what is already required of a large business contractor with regard to submission and compliance with a subcontracting plan.  My view is that DoD has failed at doing good administration of this element of a contract requirement (sub plan administration), when applicable, and so they invented the ideal of putting a performance plan into contracts as well.  Yahoo!  But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?    Or even had there performance evaluation reflect same?  Overall what it accomplishing that is not already in the contract.

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business.  Yahoo!  Goals accomplished at the get go.

Now I am going to go "Let'er Buck!"

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25 minutes ago, C Culham said:

@Don Mansfield @joel hoffman

Sorry for the contractor    my comment about being a small business was rhetorical to provide an example.   While I am a small business I have never had a prime contract with a Fed agency but have been a sub to a Fed prime.  

Back to the issue and attempt to answer questions from just a viewer.

First I haven't missed a rodeo, I am volunteering at the best one in North America right now, always in the second full week of September, The Pendleton Round-Up.  You all should come once to this week long community event that is now in its 108th year.

To RFA and the overall concern I for one can not think of a contractual requirement that does not carry administrative burden.  This extended thread is a perfect example.

In a hope to be concise DoD's best practice is a duplication of what is already required of a large business contractor with regard to submission and compliance with a subcontracting plan.  My view is that DoD has failed at doing good administration of this element of a contract requirement (sub plan administration), when applicable, and so they invented the ideal of putting a performance plan into contracts as well.  Yahoo!  But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?    Or even had there performance evaluation reflect same?  Overall what it accomplishing that is not already in the contract.

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business.  Yahoo!  Goals accomplished at the get go.

Now I am going to go "Let'er Buck!"

 Forgive me for using voice texting while being transported to an appointment .

Carl, actually the small business participation evaluation extends beyond the small business subcontracting plan requirements for large business contractors. 

 Thank you, Don for the link that you provided to army training concerning evaluation of small business participation.

The presentation clearly pointed out that small business participation also would include involvement of the small business prime contractor or joint venture member of a joint venture etc. and performance of the contract. 

To me, this is actually an incentive for a small business proposer to self perform work and to get credit for it in the evaluation of this aspect of their proposal.

I am editing my input to this thread to indicate that self performed work is also considered to be “small business participation”. 

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28 minutes ago, C Culham said:

But my questions are then has small business participation improved, and if not how many contractors have been defaulted at the worst or at the least had some type of sanction placed on them for failing to meet the plan?

Great question, C Culham.

All that is required is "good faith" effort to comply with the plan. Because of that standard, the small business subcontracting plans don't have much "teeth" to enforce them or penalize the contractor for non-compliance.

FAR 19.701 states "“Failure to make a good faith effort to comply with the subcontracting plan,” means willful or intentional failure to perform in accordance with the requirements of the subcontracting plan, or willful or intentional action to frustrate the plan."

FAR 19.702(c) states the statutory requirement of imposing liquidated damages: "As stated in 15 U.S.C. 637(d)(8), any contractor or subcontractor failing to comply in good faith with the requirements of the subcontracting plan is in material breach of its contract. Further, 15 U.S.C. 637(d)(4)(f) directs that a contractor’s failure to make a good faith effort to comply with the requirements of the subcontracting plan shall result in the imposition of liquidated damages."

 

It is extremely rare (how many times has it ever happened?) for a contractor to get successfully slapped with liquidated damages for failure to make a good faith effort to comply with the subcontracting plan. Many of these plans include boilerplate language about activities that will qualify as good faith efforts. The contractor has to engage in those activities, but the contractor doesn't necessarily have to meet the concrete, percentage goals.  

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Related question:

The WIFCON Home Page publishes news of interest to contracting professionals. Many of those news pieces are links to Department of Justice press releases, announcing such things as indictments, sentencing, and settlement agreements. Going back to the beginning of 2018, what percentage of DOJ press releases have been related to small business/socioeconomic status fraud?

I don't know if it's easy or hard for Bob to answer that question. But my completely subjective perception is that it's been a fairly high proportion of the total.

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H2H:

It is not possible to get a complete listing of all actions because not all justice organizations are reporting.  I complained years ago asking for central reporting and DOJ did improve its reporting.  That took a couple of years.  However, I don't know how many justice organizations still don't report.  

I know during 2018 I've posted press releases of indictments, pleas, sentencing, claims, and jury decisions involving the 8(a), SBA small business, DOT's DBE, and veterans programs.  There was at least one subcontracting case under a grant too.  I didn't remember anything on the WOSB program so I checked and couldn't find anything.

I do add cases involving federal medical programs sometimes. 

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3 hours ago, C Culham said:

As to small business and the requirement for a performance plan should they receive contract award  I ask what has been accomplished as the prime is already in the hands of a small business. 

Carl, small businesses should not be required to submit a plan for a set aside procurement because the extent of small business utilization evaluation factor is only applicable to contracts that require the use of the clause at FAR 52.219-9.  Thus, the factor would only come into play in full and open competitions.

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10 hours ago, Vern Edwards said:

My assertions are true for me, and for anyone who agrees with me, until you prove to me and those others that they're wrong.

Fine, but I think you're presenting your assertions as if they were facts. That's what Merriam-Webster defines as dogmatism.

Quote

 

Definition of dogmatism

1: the expression of an opinion or belief as if it were a fact : positiveness in assertion of opinion especially when unwarranted or arrogant

 

As far as the use of commit at DFARS 215.304(c)(i), I think that could be evaluated by requesting evidence of commitment to include small business concerns in performance. Such evidence could be subcontracts contingent on contract award, joint venture agreements, and teaming agreements. I think your interpretation of "commit" as used in DFARS 215.304(c)(i) is too narrow.

 

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It’s important to  distinguish between evaluating extent of small business participation in the proposal for small business and large business offerors for source selection purposes and, for large business primes, compliance after award with the subcontracting  plan requirements of the contract. 

52.219-8  Utilization of small business concerns applies to essentially all primes above the simplified acquisition limits, with certain exceptions. It’s the Apple Pie and Mom clause.  

52.219-9 Small business subcontracting plan does not apply to small business primes and has a dollar threshold for applicability.

52.219-16 Liquidated damages - subcontracting plan  applies to those contracts containing a subcontracting plan pursuant to 52.219 -9.

 

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3 hours ago, PepeTheFrog said:

It is extremely rare (how many times has it ever happened?) for a contractor to get successfully slapped with liquidated damages for failure to make a good faith effort to comply with the subcontracting plan.

I looked for evidence a few years ago for a presentation on the subject. I couldn't find anything. All I have is a third-hand anecdote of NAVFAC assessing liquidated damages.

 

1 hour ago, Retreadfed said:

Carl, small businesses should not be required to submit a plan for a set aside procurement because the extent of small business utilization evaluation factor is only applicable to contracts that require the use of the clause at FAR 52.219-9.  Thus, the factor would only come into play in full and open competitions.

I think Carl is referring to the small business participation plan that a small business would have to submit in a full and open competition.

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3 hours ago, Don Mansfield said:

As far as the use of commit at DFARS 215.304(c)(i), I think that could be evaluated by requesting evidence of commitment to include small business concerns in performance. Such evidence could be subcontracts contingent on contract award, joint venture agreements, and teaming agreements. I think your interpretation of "commit" as used in DFARS 215.304(c)(i) is too narrow.

Is that a fact?

I think all you need as evidence of a commitment is the statement: I promise to do it, and a signature.

 

 

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38 minutes ago, Don Mansfield said:

I think Carl is referring to the small business participation plan that a small business would have to submit in a full and open competition.

That may be.  However, it is good for everyone to understand what the requirement is.  This discussion brings up a good point.  If a procurement is conducted using full and open competition and the winner is not a small business, and the "utilization plan" is included in the small business subcontracting plan, that large business only has to make a good faith effort to comply with the combined plan.  On the other hand, if a small business wins and does not have to submit a small business subcontracting plan, the "utilization plan" could be incorporated into the contract without the good faith requirement.  This seems potentially to place a heavier burden  on small businesses than large businesses.  To that extent, this would seem to have a significant impact on small business concerns.  If this has been happening, I am somewhat surprised that small businesses and the SBA have not been howling.

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@Retreadfed

32 minutes ago, Retreadfed said:

If a procurement is conducted using full and open competition and the winner is not a small business, and the "utilization plan" is included in the small business subcontracting plan, that large business only has to make a good faith effort to comply with the combined plan. 

Here is the actual text of the DFARS rule:

Quote

215.304  Evaluation factors and significant subfactors.

      (c)(i)  In acquisitions that require use of the clause at FAR 52.219-9, Small Business Subcontracting Plan, other than those based on the lowest price technically acceptable source selection process (see FAR 15.101-2), the extent of participation of small businesses to include service-disabled veteran-owned small business concerns, HUBZone small business concerns, small disadvantaged business concerns, and women-owned small business concerns in performance of the contract shall be addressed in source selection. The contracting officer shall evaluate the extent to which offerors identify and commit to small business performance of the contract, whether as a joint venture, teaming arrangement, or subcontractor.

                    (A)  See PGI 215.304(c)(i)(A) (DFARS/PGI view) for examples of evaluation factors.

                    (B)  Proposals addressing the extent of small business performance shall be separate from subcontracting plans submitted pursuant to the clause at FAR 52.219-9 and shall be structured to allow for consideration of offers from small businesses.

                    (C)  When an evaluation assesses the extent that small businesses are specifically identified in proposals, the small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219-9 to facilitate compliance with 252.219-7003(e).

Emphasis added.

I read subparagraph (B) as indicating that the proposal (read, promises) to be elicited about small business participation/performance is to be separate from the small business subcontracting plan and is separately enforceable as such. However, subparagraph (C) requires that the two plans be coordinated. Separate but coordinated promises.

If I'm reading it right, and I think I am in fact, the problem you identified should not occur. The contract with the selectee, if large, will contain coordinated but separate promises: (1) the small business participation/performance promise and (2) the small business subcontracting promise. If the selectee is small its contract will contain only the promises about small business participation/performance.

Contractually saavy COs (Do they exist?) will understand this and see to it that the large business's participation/performance proposal and its subcontracting plan language read appropriately.

I'm not defending the DOD policy or its implementing regulation, but they are not beyond comprehension by competent COs.

Regulations are not tutorials, and COs have to bring something to their work other than complaints about how screwed up the regs are. They have to be able to make sense of things.

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40 minutes ago, Vern Edwards said:

When an evaluation assesses the extent that small businesses are specifically identified in proposals, the small businesses considered in the evaluation shall be listed in any subcontracting plan submitted pursuant to FAR 52.219-9

This appears to require more than coordination between two "plans."  As you have mentioned, the DFARS does not require the submission of "utilization plans" only a statement of the extent to which small businesses will be utilized in performance of the contract.  However, Don asserts that some components are including these statements in resulting contracts.  As the quoted language indicates, if the contractor is required to provide a small business subcontracting plan, any small business concerns listed in the utilization statement "shall" be included in the subcontracting plan.  Thus, there is mandatory overlap between the two in this circumstance.  Further, I do not see anything in the DFARS that would prohibit a component from including the utilization statement in the subcontracting plan.  It only says that the two are to be submitted separately.  This inclusion may or may not be happening.  I have to admit that I do not have insight into how these requirements are being implemented in practice.   

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3 hours ago, Retreadfed said:

This appears to require more than coordination between two "plans"... Thus, there is mandatory overlap between the two in this circumstance. 

Retread, I guess I wasn't clear. That's what I meant by "coordinated promises." I apologize for being obscure.

3 hours ago, Retreadfed said:

However, Don asserts that some components are including these statements in resulting contracts. 

I think that's what is supposed to happen. If you ask someone for a proposal, and if, according to FAR 2.101, proposal is another word for offer, then you want the offer, when accepted, to be binding.

This policy has been with us throughout the current century. To the best of my knowledge it has not been particularly controversial or troublesome.

 

 

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On 9/13/2018 at 3:43 PM, Vern Edwards said:

Retread, I guess I wasn't clear. That's what I meant by "coordinated promises." I apologize for being obscure.

I think that's what is supposed to happen. If you ask someone for a proposal, and if, according to FAR 2.101, proposal is another word for offer, then you want the offer, when accepted, to be binding.

This policy has been with us throughout the current century. To the best of my knowledge it has not been particularly controversial or troublesome.

 

 

“Like!”

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